Love is blind, or so it’s said, but when it comes to long-term relationships, there are some differences you can’t hide from forever. This is especially true when it comes to your financial compatibility. A multitude of studies have suggested that the No. 1 source of stress in many relationships is disagreement over money-related issues. Sometimes these disagreements can even lead to divorce for married couples. Whether you’ve met someone online or elsewhere, if things are getting serious with whomever you’re seeing, then considering your financial future together is an important next step. While no one can see the future, it’s a good idea to plan for it, and one of the best ways to do so is by considering how compatible you and your partner are financially. Doing so will not only secure your financial future, but it’ll save you from experiencing potential heartache and financial trouble down the line. Below are some of the things you should consider to evaluate your relationship’s financial compatibility.
Why couples should talk about finances
By no means should love boil down to how much money you or your partner make. At the same time, love that is completely blind to financial considerations may be doomed to fail. Regardless of whether or not a couple shares their finances with each other, they do usually share expenses – things like rent or mortgage payments, utilities and food costs are often a joint effort. Thus, couples often rely on each other financially and it is in their best interest to be on the same page. Just like you shouldn’t run a company without having any idea of how much you’re spending to make a profit, you shouldn’t be in a serious relationship without knowing how, collectively, your finances are affected by your current obligations. Factors such as your partner’s credit scores, any debt they may be carrying and their income affect you, especially if you’re cohabitating.
Something else couples should talk about is financial goals, as you’ll want to know if you are both working toward a common goal. For example, if you are carrying credit card debt, it’s best to discuss the options to pay off that debt and set goals for repayment, or if you plan to own a house one day, that is likely something your partner should know about, as it’s a financial goal that will impact them greatly. Even if the goals are not ones that can be achieved in a short amount of time, they are worth taking about, as they may help you and your partner see if you share common goals, a sign that you may be financially compatible.
When should couples talk about their financial compatibility?
There’s no set time for you to talk about these things; however, if you see your partner as “the one,” then you’ll want to make sure they’re the one on every level, especially when it comes to your financial compatibility. Although you don’t need to rush into talking about finances immediately – we wouldn’t suggest bringing it up on the first date – it’s best not to wait until marriage or you move in together to find out if you’re financially compatible with your partner, as you may be in for an unpleasant surprise.
Is your partner financially transparent?
One of the most important things in a relationship is honesty, and that goes double when it comes to maintaining finances while you’re in a relationship. Financially transparent partners should share with each other the key indicators of their net worth – at the very least their debt, credit health and income – so that you have a good idea of their existing financial obligations and what kind of contributions they might be able to make. Different types of debt affect people’s lives in different ways, so knowing whether your partner has student loans, credit card debt or something else altogether is vital. This information is important because you’ll use it to plan out shared expenses like housing and childcare, as well as determine the types of loans and credit you’ll qualify for down the road. This isn’t a one-time conversation, though, because finances can change over time and both you and your partner should be willing to give you updates about changes in their finances. Ideally, you should both schedule time for regular financial conversations — for example, once every month — where you check in with each other and plan out your shared financial plans and goals. Having these check-ins will also likely make your tax season much easier, as you’ll be able to claim more deductions by being aware of each other’s finances. Even if you file separately, financial transparency requires you to know your own financial health, which will still be useful for you.
Are your own finances in order?
While serious relationships, especially marriages, usually result in a sharing of some financial decisions, there may still be areas where your finances remain independent. For example, your credit scores are something you’ll both have to work on alone, as you will each have a separate credit history. The main thing to take into consideration is if your partner can manage their half of the relationship by staying on top of their own financial obligations. Does your partner demonstrate control in maintaining their credit, saving for retirement on their own and putting aside some money in a savings account? If both of you can handle your respective finances well, then when it comes to the big things you’ll likely work on together – like putting your child through school or purchasing a home – you’ll do fine.